Pattrick Smellie: Pressure on Jacinda Ardern over water quality amid farmer well-being concern

A growing number of farmers are feeling massive personal pressure from several directions. Photo / File

COMMENT

Suddenly, farmers' mental health is in the news again.

It's not sensationalist or alarmist. It's a fact.

A growing number of farmers are feeling massive personal pressure from several directions, with the greatest source of that pressure being felt as the Government's agenda to make agriculture contribute to cleaner water and climate change action.

It may not be totally rational. Global prices for our key agricultural commodities are currently high and include a very healthy-looking dairy payout in the season ahead. Export returns are further assisted by a weak Kiwi dollar.

Environmental groups would claim – fairly some cases, absurdly in others – that farmers aren't being asked to do all that much.

Factors beyond government policies have also shaken the sector.

Fonterra's farmers are shook up by the scale of the co-operative's losses and desperately want the new leadership, under chief executive Miles Hurrell, to work. They know it will take a while and that the history saps optimism.

Some of their fears stem from a fundamental problem with the New Zealand farming business model, which capitalises future earnings into the price of land.

That makes New Zealand farmland far more expensive than it would be if capital gains were taxed when farms change hands, and requires more borrowing as a result.

The proposal for a capital gains tax, despite now being dead, was the catalyst for many current farm owners to become afraid of what this Government might do.

Meanwhile, banks collectively are raising the drawbridge on new farm lending, making the capital-heavy farming business model less sustainable, anyway.

Add in the unknown but presumably substantial costs of on-farm investments to meet new climate change and freshwater clean-up requirements, and it looks even more unsustainable.

For many, meeting those requirements will require a sympathetic bank manager. What if new bank lending is harder and more expensive to get, farmers are asking. Can I continue to farm?

For most good farmers, this is not an issue of dodging their responsibilities, although there are still plenty of Luddites out there too.

Most know that the long-term outcome of those investments should be more productive, profitable farms that pollute waterways far less, drive down their greenhouse gas emissions, and create products that increasingly picky high-value customers will see as ethically acceptable.

In the short-term, however, it just looks like too high a hill to climb for many farmers, with reports multiplying about the number of farmers in different regions who are said to be on "suicide watch".

Set aside as irrelevant whether a kind of collective hysteria or despair might be taking hold here.

For a Government determined to make a generational change in farming practice for environmental reasons, and that has promised to make that change in a just and equitable manner, it matters only that the phenomenon is real.

Fonterra's farmers are shook up by the scale of the company's losses and desperately want the new leadership to work. Photo / File

That is a huge problem particularly for this Government, which has governed on a promise to prioritise '"well-being" and not to traumatise communities with Rogernomics-style policy blitzkriegs.

Prime Minister Jacinda Ardern's mantras since election have been her "wellbeing" agenda commitment to a "just transition" that brings people along rather than tramples them on the way through.

In short, the pressure of threatened policy change has become a legitimate wellbeing and just transition issue for rural communities.

That's why, for all the accusations of "selling out" to farming leaders on pricing methane and nitrogen emissions, Ardern took that deal.

It's also why she must be concerned by economic analysis for DairyNZ about the potential impact on farming if the Government fully implements its current proposals for freshwater clean-up.

The difference between a shift in the right direction and a major change in freshwater quality is in the region of $5 billion a year to the size of the economy by 2050, the Sense Partners analysis says.

That's still less than 1 per cent of GDP, but it's concentrated in just a few parts of the country. A 24 per cent reduction in current dairy production is forecast – an achievable if painful transition, as evidenced by land use change caused by the 1980s Rogernomics reforms.

The key to whether costs are manageable or potentially unmanageable is the treatment of phosphorous and nitrogen nutrient run-off, according to Sense Partners, and this is clearly where a compromise could emerge. It would still be a challenging transition for farmers, but also mean slower progress on cleaner freshwater.

Whether National would play as nicely on such a water deal as it did over the climate change deal remains to be seen. Its leader, Simon Bridges, can afford to float beneficiary-bashing policies, but would a responsible future Prime Minister exploit farmers' genuine emotional and financial fragility for political gain?

For Ardern, compromise on water pollution represents a greater political challenge than the deal with farmers on climate change policy.

Notwithstanding the rise of Extinction Rebellion, school strikes and the rest, there is an even more deep-seated public appetite for this Government to take action on dirty waterways than on climate change.

Any substantial backdown on that expectation is not a political option.